Will my car insurance cover damages from an accident that happened on the same day of purchase?

Rock Hill, SC | July 8, 2013 2:21pm

My wife and I just purchased a vehicle from a dealership and on the way back she got into an accident and was at fault. The problem lies in that the car we just bought got into an accident before I could get home to add it to the policy. The existing policy for my old car is liability only, however, I was going to add full coverage when I got home to the new car as required by the bank. After talking with my insurance company, they only want to transfer liability coverage over to the new vehicle since the existing policy for my other car was only liability. Are they not required to insure for full coverage since that is what I would have had for the new car? The claims rep said he has to get approval from his manager to add collision on the new vehicle to cover it on the accident day.

This is odd, usually when buying a car the bank will not give you the loan without the vehicle being added to your insurance policy, before leaving the lot - if the coverage was not in place you may need to speak to a defense attorney, if covered the insurance company will defend the claim, good luck.

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If you had yet to add full coverage to the new vehicle then you did not have full coverage on the new vehicle. They will not back date a future policy. I would suspect that you will end up with liability only coverage.

This question can be answered by reading the specific provisions of your automobile policy. Usually a newly acquired vehicle is covered under an existing policy for a brief time until you provide your insurance company with the details of the new car. The extent of the coverage is the same as that for your old car until you specifically request additional coverages. If you had liability only, then your wife would be covered for damage done to other vehicles or persons up to the liability limits, but not for damage to your own car.
Since the accident occurred on the day of purchase, the car may have still been covered by the dealer's policy, and you should check with them. If you financed the new car, the dealer usually verifies that you have full coverage with your carrier. Again, you should check with the dealer on that issue.
The insurance company is not required to guess what you would have wanted to do, and only provides coverage you or someone acting for you such as the dealer actually requested. If the policy covering your old car is confusing or vague on this issue, you should consult an attorney for advice.

This response does not create an attorney client relationship, and is for general information purposes only. You should promptly contact an attorney in your area to ascertain your legal rights.

Mr. Crosner is licensed to practice law in California and has been practicing law in California since 1978. The response herein is general legal and business analysis.. It is not intended nor construed to be "legal advice" but rather it is analysis, and different lawyers may analyze this matter differently, especially if there are additional facts not reflected in the question. Oftentimes the question does not include significant and important facts and timelines that, if known, could significantly change the reply and make it unsuitable. I am not your attorney until retained by a written retainer agreement signed by both of us. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here.